The government has been urged to help smaller employers cope with the demands of the proposed new national pensions scheme when it comes into force in five years’ time. Under the personal accounts scheme, detailed in the government’s pensions white paper, employers will pay 3 per cent towards the retirement savings of their employees. However, an employers’ group has argued that the government should commit itself to subsidising smaller businesses that may otherwise struggle to meet the costs of making and administering the payments. The EEF said that a number of smaller employers may encounter problems if financial help is not forthcoming from the government during the initial stages of the scheme. David Yeandle, the EEF’s Deputy Director of Employment Policy, commented: “We support personal accounts and believe the role of smaller employers will be critical for their successful implementation given many of those who are not currently saving for their retirement work in small businesses. Government should take all necessary steps to gain the support of these employers for personal accounts and we believe there is a strong case for providing them with some initial financial assistance.” The new system would involve setting up a national pensions fund for all employees who do not have an occupational scheme. Employees would be expected to make a contribution of 5 per cent to the scheme, and employers a contribution of 3 per cent. The EEF’s plans would see a annual subsidy of up to £220 million compensating smaller firms for a proportion of the contributions they would make in the first three introductory years of the scheme. Smaller firms would be defined as those employing up to 49 members of staff. The Department for Work and Pensions said that the issue of subsidies would be assessed at a time closer to the launch of the new scheme. Date:11 June 2007
Content by: Made Simple Group
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